FKLI closed : 1589 changed : +6.5 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histrogram : resume rising, buyer still in charge.
Support : 1580, 1565, 1550, 1540 level.
Resistance : 1590, 1600, 1610, 1620 level.
Comment :
FKLI closed recorded gain with better volume traded doing 2 points discount compare to cash market that closed higher recorded new historical high while Asia markets ended mixed and European markets currently trading lower with overnight U.S. market closed marginally lower.
Regional news development are negative sided with Temasek Holdings Pte selling stakes in China Construction Bank Corp. and Bank of China Ltd., hours after Moody’s Investors Service said the credit outlook for lenders may sour. Moody's also slashed Portugal's credit rating to junk status, reigniting fears that it may need a second rescue package.
Local front buying interest remained high on index link heavy weight stocks lift benchmark index to all time high.
Daily chart formed an up doji bar candle with upper shadow closed near upper Bollinger band after market opened and traded higher towards second session before easing downward surrendered partial of the intraday gain to closed off the high of the day.
Chart reading resumed calling an upside biased market development after yesterday small pullback testing support and resistance level.
When to buy : buy at support or weakness with moderate cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

Euro struggles, China banks fall on Temasek selldown
HONG KONG, July 6 (Reuters) - Chinese banking shares fell for a second day on Wednesday, while the euro clawed back losses but was still seen at risk after Moody's slashed Portugal's credit rating to junk status, reigniting fears that it may need a second rescue package.
"Valuations-wise, we've probably seen the bottom but it's a confidence issue right now," said Tom Kaan, a director at Louis Capital Markets in Hong Kong.

Corn, soy dip on improved U.S. crop conditions
SINGAPORE, July 6 (Reuters) - Chicago corn and wheat slipped on Wednesday, as forecasts for crop-friendly weather in the U.S. Midwest and a government report showing slight improvement in crop ratings weighed on sentiment.
"June selloff (in wheat) was too aggressive and it has brought down prices to levels that consumers would view as good value," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.

Most U.S. corn to pollinate in later than normal
CHICAGO, July 5 (Reuters) - Most of the U.S. corn crop will enter its key yield-determining phase a week or more later than normal, during the hottest part of July, as it got off to a slow start, a senior agricultural meteorologist said on Tuesday.
"I would expect the key time period for pollination to be the two weeks between July 10 and July 24," Cropcast forecaster Donald Keeney, told Reuters global ags online forum. "That is about a week later than normal -- typically the crop pollinates from July 3 to 17."

US corn, soy ratings seen modestly higher
CHICAGO, July 5 (Reuters) - U.S. corn and soybean condition ratings were expected to rise modestly from a week ago as warm temperatures across the U.S. Midwest largely benefited the developing crops, analysts and traders said on Tuesday.
The U.S. Agriculture Department on Tuesday afternoon was expected to rate 69 percent of the corn crop in good to excellent condition, up 1 percentage point from a week ago, according to a Reuters poll of 10 analysts.

Vietnam to delay rice stockpile as prices stay high
HANOI, July 6 (Reuters) - Vietnamese rice exporters will delay for an indefinite period an industry plan to buy 1 million tonnes of milled summer-autumn paddy for a three-month stockpile due to high prices, state-run newspapers cited industry officials as saying on Wednesday.
They had planned to buy the grain on domestic markets between July 15 and Aug. 30 to prevent price drops to below 5,000 dong (24.4 U.S. cents) per kg, a typical move to support prices as the Mekong Delta harvest peaks.

Brazil cocoa arrivals surge after holiday pause
BRASILIA, July 5 (Reuters) - Cocoa arrivals in Brazil surged in the last week as a backlog that arose from the previous week's holiday was cleared, data from Bahia Commercial Association and cocoa analyst comments showed on Tuesday.
Bahia-based cocoa analyst Thomas Hartmann said that looking at the average for the last fortnight when Bahia deliveries fell during the holiday week then surged last week to clear the backlog, output appeared to be in line with previous weeks.

Overnight frost possible in Brazil coffee belt -Inmet
BRASILIA, July 5 (Reuters) - Parts of Brazil's Minas Gerais coffee belt could see frost in the early hours of Wednesday morning, state weather forecaster Inmet said late on Tuesday, adding that if any freeze occurred it would likely be mild.
Frost can kill coffee trees' leaves and branches, reducing output in the following year's crop. Such freezes are rare but the worst such since the last major freeze in 2000 occurred last week, but was mostly confined to minor producer Parana.

Brazil cane crop may stay dry in July-Somar
SAO PAULO, July 5 (Reuters) - Brazil's main center-south sugarcane belt will continue dry through the month of July with the exception of a few southern regions, forecaster Somar said on Tuesday.
The lack of widespread rain over the world's leading sugarcane crop in southeastern Brazil helps harvesting, allowing cutters into the field to bring in the massive crop. But it will slow the growth of newly planted cane fields that should mature in 2012.

Russia state trader to ship 100,000 T wheat in July
MOSCOW, July 5 (Reuters) - Russian state grain trader the United Grains Co plans to export up to 100,000 tonnes of wheat to Mediterranean countries until the end of July, it said on Tuesday.
"These will be Mediterranean countries, where we have established stable business relations with buyers," Chief Executive Sergey Levin said in a statement.

Oil World forecasts record global sunseed crop
HAMBURG, July 5 (Reuters) - The global 2011/12 sunflower seed crop will rise to a new record of 35.85 million tonnes, up by 2.9 million tonnes on the previous season, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
This was up by 0.4 million tonnes on Oil World's previous estimate for 2011/12 in June.

Brent crude rises on tighter supply prospects
SINGAPORE, July 6 (Reuters) - Brent crude edged up on Wednesday, rising for a second straight session on expectations of higher demand in the months ahead and tighter U.S. inventories, but concerns about moderating economic growth in China and euro zone debt woes kept a lid on gains.
"We expect strong demand growth in China, India, Saudi Arabia and Brazil, while non-OPEC supply increases are unlikely to keep up," said Chen Xinyi, a commodities analyst with Barclays Capital. "Our demand forecast for China already takes into account the moderation in GDP growth in 2012."

Australia Newcastle coal exports rise 4 percent
SINGAPORE, July 6 (Reuters) - Coal shipments from Australia's Newcastle port, which handles mostly thermal coal used in power plants, rose 4 percent during the past week, the Newcastle Port Corporation said.
Exports from the eastern coast port were 2.429 million tonnes in the week to July 4, up from 2.335 million the previous week, Newcastle Port Corporation said on its website on Wednesday.

U.S. gasoline price rises first time in 8 weeks-Govt
WASHINGTON, July 5 (Reuters) - Gasoline prices increased for the first time in eight weeks, the Energy Department said on Tuesday, reflecting higher crude oil costs.
The national price for regular unleaded gasoline rose half a penny to $3.58 a gallon, the first increase since May 9 when gasoline reached a peak $3.97, the department said in its weekly survey of service stations.

LME copper down, Portugal rating cut weighs
SHANGHAI, July 6 (Reuters) - LME copper edged down on Wednesday, as Moody's downgrade of Portugal's credit rating to junk triggered demand worries, but supply disruptions in Chile and Indonesia are expected to keep a floor under prices. Three-month copper on the London Metal Exchange edged down 0.4 percent to $9,502 a tonne by 0149 GMT, after rising 0.9 percent in the last session.

Gold hovers near 1-1/2 week high on Portugal rating cut
SINGAPORE, July 6 (Reuters) - Spot gold on Wednesday hovered near a 1-1/2-week high hit in the previous session, supported by renewed worries about the euro zone's debt problem after Moody's slashed Portugal's credit rating to junk.
"Portugal was certainly the trigger, and the mood in the financial markets has turned a bit cautious," said a Singapore-based trader.

EU wants amicable solution in China exports row
STRASBOURG, July 5 (Reuters) - The European Union will use a World Trade Organization ruling to try to coax China into ending export curbs on rare earth minerals crucial for EU high-tech production and jobs, the EU's trade chief said on Tuesday.
The WTO on Tuesday ruled China broke trade rules by restricting exports of certain raw materials, dismissing China's claim its export policies are steered by environmental concerns, and dealing a victory to the EU, United States and Mexico.

GLOBAL MARKETS: Stocks ease, euro fragile as risk rally pauses
HONG KONG, July 6(Reuters) - Asian stocks were off to a weak start while the euro remained fragile on Wednesday morning after Moody's slashed Portugal's credit rating to junk status and as investors take a breather after the past week's rally in risky assets.
"While the market has moved on from Greece a little, there is still significant concern out there that it's not close to the end game," said Greg Gibbs, strategist at RBS in Sydney.

OIL: Crude extends gains ahead of key data
TOKYO, July 6 (Reuters) - U.S. crude futures extended gains on Wednesday, edging closer to a three-week intraday high marked the previous day, as investors awaited key industry data expected to show a decline in U.S. crude inventories.
Oil also got support from an upgraded price forecast from Barclays Capital and upbeat U.S. factory.

NATURAL GAS: Natural gas rises with heat in post-holiday trade
NEW YORK, July 5 (Reuters) - U.S. natural gas futures rose a little more than 1 percent on Tuesday, boosted along with cash gas by the return of post-holiday industrial demand, hot weather and stronger crude futures.
Cooling degree days in the lower 48 were expected to be more than four above normal early this week before tapering off to about two above normal late in the week and over the weekend, according to Thomson Reuters Gas Trading Analytics.

EURO COAL: Futures rise above $130/tonne
LONDON, July 5 (Reuters) - European coal futures rose for the second straight day on Tuesday, pulling up together with power and gas forward benchmarks.
"The market clearly thinks that the sell-offs 10 days ago were overpronounced, so many see an opportunity here to open new long positions at low price levels in power, gas and coal," one trader said and added that this had pushed coal, gas and power prices up before the oil market reacted.

COMMODITIES: Oils, grains, metals jump on Q3 bargain hunting
NEW YORK, July 5 (Reuters) - Commodities rallied in tandem on Tuesday, reaching their highest prices in weeks as bargain hunters bet that a second-quarter slump was overdone.
"We're seeing crude oil higher partly on the start of the quarter and partly on the start of contrarian speculation looking for a pullback in the dollar," said Hamza Khan, an analyst with The Schork Group in Villanova, Pennsylvania.

POLL-U.S. crude stocks seen down on lower imports
BANGALORE/NEW YORK, July 5 (Reuters) - U.S. crude oil inventories were forecast down last week for the fifth straight time as imports declined again, analysts projected on Tuesday in a preliminary Reuters poll ahead of weekly reports.
The inventory data will come out a day later than usual due to the July Fourth holiday.

Government earmarks 33 companies for divestment
The Government has identified 33 government-linked companies (GLCs) that are ready for divestment through partial sales, outright sales or listings on the stock market. The bulk of them, or 24 companies, will be involved in these exercises between now and the end of 2012. This is part of the government’s Strategic Reform Initiatives (SRIs), or policy measures to drive its Economic Transformation Plan (ETP). (Financial Daily)

Malaysia: Unveils economic measures before planned protests
Malaysia announced plans to sell state companies, improve public finances and relax foreign ownership rules, persisting with efforts to revamp the economy ahead of protests from groups demanding fairer elections. The Government will scale back its business interests, with 33 state-linked companies identified to be listed, partially sold or divested outright, Datuk Sri Idris Jala, minister in the Prime Minister’s Department, said. Foreign equity and employment restrictions will be gradually removed in service industries including health care, education, engineering and law, he said. (Bloomberg)

Malaysia: Export growth slows as electronics sales to US ease
Malaysia’s export growth slowed in May as electronics manufacturers shipped fewer goods to the US, complicating the central bank’s job of curbing inflation while supporting an economic expansion. Overseas shipments climbed 5.4% to RM55.09bn (USD18bn) from a year earlier after gaining 11.1% in April, according to a trade ministry statement. The median estimate of 14 economists in a Bloomberg News survey was for an 11% gain. Malaysia’s industrial production unexpectedly fell in April after the March earthquake and tsunami in Japan disrupted regional trade, clouding the outlook for exporters from the Philippines to Thailand. Slowing growth in the US and the European debt crisis have also threatened demand for Asian goods. (Bloomberg)

Japan: May run out of money if bond bill isn’t passed, Noda says
Japanese Finance Minister Yoshihiko Noda said the government may run out of money as early as October unless a bill authorizing bond sales is passed in parliament. “If the bill is not passed in the current diet session, the seamless management of the budget beyond September will be difficult,” Noda said at a press conference in Tokyo. “We’ve got our backs against a wall and need to do our best to avoid that situation.”Prime Minister Naoto Kan needs parliamentary approval to issue bonds, which will pay for almost half of the annual budget this fiscal year. The premier said he won’t resign unless the bill is passed, amid concern the opposition will use its control of the upper house to hold up the release of the funds. (Bloomberg)

China: Services industries expand as new orders, jobs climb
China’s services industries expanded at the second-fastest pace this year as new orders and employment climbed, supporting growth amid the government’s campaign to cool inflation. A purchasing managers index was 54.1 in June compared with 54.3 in May, HSBC Holdings Plc and Market Economics said. A reading above 50 indicates expansion. “The continuous steady expansion of the service sector, in particular the notable improvement in employment, should lend support to economic growth,” HSBC’s chief China economist Qu Hongbin said in the statement. “This should provide room for Beijing to keep the current tightening measures for another two to three months to slow inflation meaningfully into the fourth quarter.”(Bloomberg)

Australia: Trade surplus in may widens to seven-month high
Australia’s trade surplus in May was the widest in seven months as the mining industry fueled a recovery from the economy’s worst quarterly contraction in two decades. Exports exceeded imports by AUD2.33bn (USD2.5bn), from a revised AUD1.62bn surplus in April, the Bureau of Statistics said in a report in Sydney. The median estimate in a Bloomberg News survey of 25 economists was for a surplus of AUD1.9bn. Reserve Bank of Australia Governor Glenn Stevens is forecast to hold interest rates at 4.75% for a seventh meeting to help the economy recover from natural disasters at home and abroad. (Bloomberg)

U.S: Orders to factories rose 0.8% MoM in May on capital goods, after a revised 0.9% MoM decline in April. Demand for durable goods that are meant to last at least three years increased 2.1% MoM, while unfilled orders climbed the most since September. (Source: Bloomberg)

Portugal: Ratings cut to junk by Moody's on financing risk. The long-term government bond ratings were lowered to Ba2, or junk, from Baa1, and the outlook is negative. Discussions to involve private investors in a new rescue plan for Greece make it more likely that the European Union will require the same pre-conditions in the case of Portugal, Moody's said in a statement. (Source: Bloomberg)

China: Services industries in June expanded at the second-fastest pace this year as new orders and employment climbed. A purchasing managers index was 54.1 in June compared with 54.3 in May, HSBC Holdings Plc and Markit Economics said in a statement. A reading above 50 indicates expansion. (Source: Bloomberg)

India: Services industry growth accelerated in June, increasing pressure on the central bank to boost interest rates further to damp inflation. The Purchasing Managers' Index rose to 56.1 from 55 in May, HSBC Holdings Plc and Markit Economics said in an emailed statement. A reading above 50 indicates an expansion. (Source: Bloomberg)

Philippines: June inflation accelerated to the fastest pace in 26 months after utility and transport costs rose. Consumer prices increased 5.2% YoY in June, the biggest gain since April 2009, according to data released by the National Statistics Office in Manila using 2006 as a base year. Inflation was 4.6% YoY using 2000 as a base year. (Source: Bloomberg)

Vietnam: Central Bank cuts repurchase rate- Vietnam's central bank cut its repurchase rate by one percentage point even after inflation accelerated to one of the fastest paces in the world. The State Bank of Vietnam said it lowered the rate to 14% from 15%, the first reduction since October 2010, according to an emailed statement. (Source: Bloomberg)

Greece: Banks ready to take part in rollover, Venizelos says
Greek banks are willing to roll over their government bonds as part of a European Union rescue plan that will keep the country out of financial markets for three years, Finance Minister Evangelos Venizelos said. “The Greek banks are ready to participate,” he said in an interview with Bloomberg Television in Athens. Greece will meet its goal of achieving a primary surplus next year and in following years, and is targeting EUR1.7bn in revenue from state-asset sales by the end of September, the minister said. He added that he will appoint a new head of the country’s privatization fund by 11 July. (Bloomberg)

Portugal: Ratings cut to junk by Moody’s on financing risk
Portugal’s credit rating was cut to below investment grade by Moody’s Investors Service on concern the country will need to follow Greece in seeking a second bailout. The euro dropped for the first time in seven days. The long-term government bond ratings were lowered to Ba2, or junk, from Baa1, and the outlook is negative. Discussions to involve private investors in a new rescue plan for Greece make it more likely that the European Union will require the same pre-conditions in the case of Portugal, Moody’s said in a statement. (Bloomberg)

US: Orders rose 0.8% in May on capital goods
Orders placed with US factories increased in May, indicating manufacturing may rebound from a slowdown in economic growth in the first half of 2011. Bookings for manufacturers’ goods rose 0.8%, less than forecast, after a revised 0.9% decline in April that was smaller than previously estimated, figures from the Commerce Department showed today in Washington. Demand for durable goods that are meant to last at least three years increased 2.1%, while unfilled orders climbed the most since September. Manufacturing is showing signs of recovering from parts shortages linked to the earthquake and tsunami in Japan, at the same time commodity costs ebb and growing economies overseas fuel exports. (Bloomberg)

MBM Resources: On expansion drive. MBM Resources Bhd plans to build several showrooms and service centres in Johor Baru, Perak and Penang by 2015 to expand its automotive business. The Johor Baru project will be completed in the next 12 months and will be similar to the company's showroom in Glenmarie, Shah Alam. (Source: Business Times)

MRCB: Unit gets KL land for 3 projects in Brickfields. Country Annexe Sdn Bhd (CASB), a 70% subsidiary of Malaysian Resources Corp Bhd (MRCB), will be given land in Kuala Lumpur with a potential RM1b gross development value, in consideration for undertaking three projects in the city's Brickfields area. The projects consist of Little India, Pines Bazaar and Ang Seng Development. (Source: The Star)

Guan Chong: To double capacity by 2Q12. Guan Chong Bhd plans to double the capacity at its Batam plant by 2Q12, which will boost its annual cocoa grinding capacity to 200,000t. It has fully sold for the entire 2011 due to rising demand for its cocoa ingredients of butter and powder. (Source: The Edge Financial Daily)

Yinson: Eyes RM800m worth of jobs. Yinson Holdings Bhd is set to bid for more contracts worth RM800m. It is currently bidding for FSO, PSV and AHTS jobs locally and abroad particularly in Vietnam. Yinson's current orderbook stands at RM1.2b. (Source: The Edge Financial Daily)

Plantation: Sarawak palm oil industry earmarked for major expansion.. Sarawak's plans to double the land earmarked for oil palm plantations to two million hectares will act as a key driver for the state's economic development. (Source: The Edge Financial Daily)

Kencana buys HK-based firm
Kencana Petroleum’s wholly owned Kencana Torsco SB has paid RM11.57m for 60% of King Hang Engineering Company Ltd (KHE) to support the expansion of group’s fabrication business in the region The acquisition is expected to contribute positively to its future earnings and net asset per share, Kencana said in a statement yesterday. (Financial Daily)

Genetec secures RM45m worth of new orders
ACE Market-listed machine design specialist Genetec Technology has secured new orders amounting to RM45.4m. Of the new orders, RM26.8m was secured from existing hard disk drive sector clients whilst the remaining RM18.6m is from non-hard disk drive sector clients, the company said in a statement yesterday.( Malaysian Reserve)

Shares stabilise; euro off 1-mth high
LONDON, July 5 (Reuters) - World stocks steadied below a recent 4-1/2 month high while the euro fell as worries about further monetary tightening in China and caution over the euro zone and U.S. economic outlook made investors hesitant.
A pick up in demand for risky assets from last week softened a bit on speculation about a possible rate rise in China this weekend, as well as a Moody's report saying the scale of problem loans at local governments in China may be much bigger than previously thought.

U.S. Factory Orders Rose 0.8% in May as Manufacturing Shows Recovery Signs (Source: Bloomberg)
Orders placed with U.S. factories increased in May, indicating manufacturing may rebound from a slowdown in economic growth in the first half of 2011. Bookings for manufacturers’ goods rose 0.8 percent, less than forecast, after a revised 0.9 percent decline in April that was smaller than previously estimated, figures from the Commerce Department showed today in Washington. Demand for durable goods that are meant to last at least three years increased 2.1 percent, while unfilled orders climbed the most since September.

U.S. Stocks Fall as Moody’s Cuts Portugal Rating, Offsetting Energy Rise (Source: Bloomberg)
U.S. stocks fell, ending the Standard & Poor’s 500 Index’s five-day winning streak, as a Moody’s Investors Service downgrade of Portuguese debt rekindled concern the economy will slow and offset gains by energy producers. Bank of America Corp. (BAC), the biggest U.S. lender, and General Electric Co. (GE) lost 0.8 percent as shares of financial and industrial companies led losses in the S&P 500. A gauge of banks dropped the most in the S&P 500 within 24 groups, falling 1.2 percent, as Citigroup Inc. said 2012 industry earnings estimates may be too high. Energy companies in the S&P 500 advanced 0.5 percent, the most among 10 groups.

Best Consumer Credit Scores Since 2006 Reveal Lending Rebound Across U.S. (Source: Bloomberg)
Michael Busick says his credit union “was shocked” to discover his credit score was 812 of a possible 850 when he applied for a $19,500 new-car loan. The loan officer told Busick he rarely sees scores so close to perfect, said the Charlotte, North Carolina, math teacher, who added that he always pays his bills on time and doesn’t “overextend.” He got the funds in May. The average U.S. credit score -- a predictor of the likelihood lenders will be paid back -- rose to 696 in May, the highest in at least four years, according to Equifax Inc. (EFX), a provider of consumer-credit data. The ratio of consumer-debt payments to incomes is the lowest since 1994, and delinquencies have dropped 30 percent in two years, Federal Reserve data show.

Treasuries Snap Advance as Economists Say U.S. Economic Growth to Quicken (Source: Bloomberg)
Treasuries snapped yesterday’s biggest gain in a week as economists said U.S. gross domestic product growth is poised to quicken this quarter to the fastest pace since the start of 2010. The difference between two- and 30-year yields widened to 3.95 percentage points, the most in three months. Investors are demanding a greater premium to buy the longest maturities as protection against the threat of quickening inflation. “I expect yields to keep rising at a moderate pace,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “The U.S. economy is on a recovery track.”

China Bank Outlook May Be Souring on Local Government Loans, Moody’s Says (Source: Bloomberg)
Chinese banks’ loans to local governments are about 3.5 trillion yuan ($540 billion) more than the national auditor’s estimate, and the industry’s credit outlook could decline, Moody’s Investors Service said. “The Chinese audit agency could be understating banks’ exposure to local governments,” Yvonne Zhang, a Moody’s analyst in Beijing, said in the report today. The “apparent absence of a clear master plan to deal with this issue” is likely to exacerbate problems and lenders may be left to manage a portion of the souring loans on their own, it said.

China Discusses Allowing SEC Probes (Source: Bloomberg)
U.S. and Chinese officials will meet next week to discuss giving American securities regulators the right to investigate companies within China for the first time, said two Chinese officials with direct knowledge of the plans. Representatives from the Securities and Exchange Commission and the Public Company Accounting Oversight Board will meet with counterparts from the China Securities Regulatory Commission in Beijing from July 11 to 12, said the officials, who asked not to be named because the talks are private.

China c.bank says to stick to prudent monetary policy
BEIJING, July 4 (Reuters) - China's central bank pledged on Monday to keep its "prudent" policy to wrestle inflation under control, but signalled some concerns over slowing growth by stressing policy "stability".
"China's economy continues to grow at a stable and relatively fast pace, but inflation pressures remain high," the central bank said in a statement to summarize its monetary policy meeting for the second quarter.

China local govt debt $540 bln understated-Moody's
BEIJING, July 5 (Reuters) - China's local government debt may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, potentially putting banks on the hook for deeper losses that could threaten their credit ratings, Moody's said on Tuesday.
China's mountain of local government debt has long been seen as a major risk by investors. The worry is that slower growth in the world's second-biggest economy could set off a wave of loan defaults and hobble its banking system.

Kan Proposes $25 Billion Earthquake Budget That May Pave Way for His Exit (Source: Bloomberg)
Japanese Prime Minister Naoto Kan proposed a 2-trillion yen ($25 billion) extra budget, spending that would fall short of what’s needed to rebuild after a record earthquake and the worst nuclear accident in more than 20 years. The spending plan, to be submitted to parliament, is half the size of outlays allocated in May. The government won’t rely on new bond sales to fund the package because it will use leftover funds from last year’s budget, according to a statement released in Tokyo today.

Japanese Stocks Swing Between Gains, Losses, Pausing After Six-Day Rally (Source: Bloomberg)
Japanese stocks swung between gains and losses, after a six day rally that yesterday pushed the Topix index to its highest level in two months. Nippon Paper led gains by makers of cardboard and pulp products, rising 4.6 percent after the company said it will raise prices. Nintendo Co. rose 4.2 percent after a report the game maker is expanding into smartphone games. Mitsubishi UFJ Financial Group Inc., Japan’s No. 1 lender by market value, led banks lower, falling 1 percent as lenders gave up gains made in the past six trading days.

Temasek’s Assets Set to Top Peak After ‘Trailblazing’ in Emerging Markets (Source: Bloomberg)
Temasek Holdings Pte’s assets probably reached a new peak after making “trailblazing” bets in emerging markets that outperformed global equities for a second year. The Singapore state investment company may say the value of its assets rose to about S$200 billion ($163 billion) when it reports results for the 12 months to March 31, surpassing the S$186 billion record a year earlier, according to Victoria Barbary at Monitor Group and Song Seng Wun at CIMB Research Pte. Temasek trimmed its stakes in two of China’s three biggest banks, according to data compiled by Bloomberg today, after raising its holdings in the world’s fastest growing major economy in the past year.

Temasek Sells $3.63B of BofC, CCB Shares (Source: Bloomberg)
Temasek Holdings Pte, Singapore’s state-owned investment company, raised HK$28.2 billion ($3.63 billion) selling stakes in China Construction Bank Corp. (939) and Bank of China Ltd., two of the mainland’s three biggest banks. Temasek sold about HK$18.8 billion of shares in Bank of China and about HK$9.4 billion in an offering of China Construction Bank stock, according to data compiled by Bloomberg. Overseas investors including Bank of America Corp. (BAC) have trimmed more than $20 billion in holdings in Chinese lenders since 2009. Chinese bank stocks fell yesterday after Moody’s Investors Service said problem loans to local governments may exceed official estimates. Temasek, which has focused on emerging markets investments, will probably say in its annual report the value of its assets rose last year, analysts said.

Euro Trades Near One-Week Low on Region’s Debt Crisis, Slow U.S. Recovery (Source: Bloomberg)
The euro was 0.2 percent from a one- week low against the dollar on speculation Europe’s debt crisis will worsen and the U.S. economic recovery will slow, damping demand for higher-yielding assets. The 17-nation currency maintained yesterday’s 0.4 percent loss against the yen after Moody’s Investors Service cut Portugal’s government bond rating to junk and before Greece’s bondholders meet with officials in Paris today to discuss their role in a second Greek rescue. A report this week is forecast to show the U.S. unemployment rate held at 9.1 percent. The Australian dollar ended two days of losses before a government report tomorrow projected to show the nation added jobs.

Portugal Rating Cut on Possible Greek Follow (Source: Bloomberg)
Moody’s Investors Service cut Portugal’s credit rating to below investment grade on concern the southern European country will need to follow Greece in seeking a second international bailout.

Portugal Government-Bond Ratings Cut to Junk by Moody’s on Financing Risk (Source: Bloomberg)
Portugal’s credit rating was cut to below investment grade by Moody’s Investors Service on concern the country will need to follow Greece in seeking a second bailout. The euro dropped for the first time in seven days. The long-term government bond ratings were lowered to Ba2, or junk, from Baa1, and the outlook is negative. Discussions to involve private investors in a new rescue plan for Greece make it more likely that the European Union will require the same pre-conditions in the case of Portugal, Moody’s said in a statement.

Greek Banks Ready for Debt Rollover as Investors Meet to Discuss Aid Plan (Source: Bloomberg)
Greek banks are willing to roll over their government bonds as part of a European Union aid plan, Finance Minister Evangelos Venizelos said, as debt-holders meet in Paris today to discuss their role in rescuing the country.

Cameron Presses on With U.K. Budget Cuts as Consumers Suffer, Stores Close (Source: Bloomberg)
Prime Minister David Cameron’s refusal to compromise on the most ambitious fiscal squeeze since World War II is testing Britain’s recovery as consumers lose faith in the economy. As he implements six years of spending cuts -- no postwar British government has managed more than two -- Britons’ confidence is waning and inflation is accelerating.

RBA Holds Key Rate at 4.75%, Sees 2011 Growth Slower Than Prior Forecast (Source: Bloomberg)
The Reserve Bank of Australia left its benchmark interest rate unchanged and said the nation’s growth pace may be weaker than previously forecast, triggering the local currency’s biggest drop in about three weeks. Governor Glenn Stevens held the overnight cash rate target at 4.75 percent in Sydney for the seventh straight meeting, as forecast by all 28 economists surveyed by Bloomberg News. He said in a statement that inflation is expected to near the RBA’s 2 percent to 3 percent target in the next year.

FOREX-Euro slips vs Swiss franc, dollar; investors cautious
LONDON, July 5 (Reuters) - The euro fell against the dollar and the Swiss franc on Tuesday as deteriorating euro zone data and concerns over the health of the Chinese economy pushed investors away from riskier currencies back towards those perceived to offer safety.
Growth in the euro zone's dominant services sector slowed for a third straight month in June and by more than an initial estimate with sluggish new orders dimming the outlook, Purchasing Managers Index data showed, while retail sales numbers were also weaker than forecasts.

Corn (Source: CME)
US corn futures end sharply higher as the market rebounds from a drop to 3 1/2-month lows last week. "Prices were oversold by a fairly large extent. The market just gathered some support there," says Shawn McCambridge, senior grains analyst for Prudential Bache. Projections for increased demand added strength to prices, as users are expected to use last week's sell-off as a buying opportunity. Talk circulated of additional purchases by China, which was suspected of buying 1.14 million tons of corn last week. CBOT December corn rises 15 3/4c to $6.12 1/2 a bushel.

Wheat (Source: CME)
US wheat futures end stronger on projections for increased demand. Foreign buyers are expected to take advantage of last week's slide in prices by ramping up purchases. US wheat looks competitive for business on the world market with wheat from the Black Sea region, known for its low cost, analysts say. Sales by farmers, who are harvesting wheat, have slowed following the price drop, temporarily reducing the available supply. CBOT September wheat rises 23 1/4c to $6.35 1/2 a bushel; KCBT September gains 15 1/4c to $7.36; MGE September jumps 28 1/2c to $8.33.

Rice (Source: CME)
US rice futures close solidly higher as India's farm minister switches course to say he will not push for grain exports. The news supported prices as Farm Minister Sharad Pawar favored exports of rice and wheat as recently as last month, analysts say. A continued ban on grain exports from India likely means increased demand for rice from other countries. CBOT September rice jumps 38c to $15.29 per hundredweight.

Wheat Prices Jump Most in Seven Weeks as Storms May Hit Kansas, Nebraska (Source: Bloomberg)
Wheat futures had the biggest gain in almost seven weeks on concern that wet weather in the Great Plains will slow the harvest in the U.S., the world’s leading exporter. Parts of Kansas, the biggest U.S. winter-wheat growing state, may have thunderstorms with as much as 1.5 inches of rain (3.8 centimeters) for two days starting tomorrow, said Joel Widenor, the director of agricultural services at the Commodity Weather Group LLC in Bethesda, Maryland. Some areas in Nebraska may get as much as 4 inches of rain in the period, he said.

Wheat Called Higher on Global Supply Concerns; Corn, Soybeans May Advance (Source: Bloomberg)
-- Wheat futures may open 20 cents to 23 cents a bushel higher on the Chicago Board of Trade, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that adverse weather will curtail growth in global output, said Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago.
-- Corn futures are called to open 10 cents to 13 cents a bushel higher on the CBOT as demand for U.S. supplies climbs in China and South Korea following a slump in prices to the lowest in six months, Grow said.
-- Soybean futures may open 10 cents to 15 cents a bushel higher in Chicago after U.S. farmers told the government they planted less this year, while hot, dry weather later in July may damage Midwest crops, Grow said. Soybean-meal futures may open $3 to $4 higher per 2,000 pounds, and soybean oil is expected to open up 0.25 cent to 0.35 cent a pound.

Wheat, Corn Gain on Speculation Lowest Prices of 2011 Attracted Importers (Source: Bloomberg)
Wheat and corn rose in Chicago on speculation this year’s lowest prices may have fueled demand from importers. Rice climbed to the highest level in almost six weeks. Exporters in the U.S., the world’s largest corn grower and shipper, sold 1.14 million metric tons of the grain for unknown destinations, the Department of Agriculture said July 1. China may have been the buyer, researcher Grain.gov.cn said yesterday. Grains fell last week after the USDA raised estimates for national plantings and stockpiles.

U.S. corn, wheat rebound on bargain hunting, demand
SINGAPORE, July 5 (Reuters) - Chicago corn jumped more than 1 percent , while wheat climbed nearly 2 percent on strong physical demand and improved global risk appetite following last week's selloff that was prompted by prospects of higher U.S. supplies.
"European shares rose for the sixth straight day on Monday and jitters about Greece continued to ease," Commonwealth Bank of Australia said in a report. "European wheat prices climbed higher overnight, supported by thoughts that the June price slump was overdone and will uncover solid physical demand."

Australia grain farmers turn cautious on early crop
GUNNEDAH, Australia, July 5 (Reuters) - Australia's grain farmers, forecast to produce a close to record wheat crop in 2011/12, are becoming less optimistic about a bumper harvest as soils around the country start to dry out because of low rainfall.
Reuters is conducting a crop tour in some key grain growing districts of New South Wales state in eastern Australia, where farmers who have faced years of drought until recently have also been struggling with higher fuel and fertilizer costs.

India aims for record grains output in 2011/12
NEW DELHI, July 4 (Reuters) - India aims to produce a record 245 million tonnes of grains in the crop year that started on July 1, Farm Secretary P.K. Basu said on Monday, a rise of about 3.9 percent on the previous year, as the government looks at allowing limited exports.
"We aim to produce a record 245 million tonnes of grains in 2011/12. Given the current trend there are no worries," he told reporters.

Patchy rains hinder Argentina corn harvest - gov't
BUENOS AIRES, July 4 (Reuters) - Rainfall in some Argentine corn growing areas delayed the 2010/11 harvest last week, but gathering progressed as normal in drier areas, the Agriculture Ministry said in its weekly crop progress report.
Argentina is the second-largest corn exporter in the world after the United States, and farmers are expected to harvest high yields despite dryness caused by the La Nina weather anomaly in December and early January.

India aims for record grains output in 2011/12
NEW DELHI, July 4 (Reuters) - India aims to produce a record 245 million tonnes of grains in the crop year that started on July 1, Farm Secretary P.K. Basu said on Monday, a rise of about 3.9 percent on the previous year, as the government looks at allowing limited exports.
"We aim to produce a record 245 million tonnes of grains in 2011/12. Given the current trend there are no worries," he told reporters.

Black Sea Grain Sales Slow On Falling World Prices
Sales in Black Sea grain exporters Russia and Ukraine are slowing as a slump in international prices has dampened trade, analysts and dealers said Monday. Prices are falling in Russia even as the country opens its borders to exports after more than a year, as buyers hold out for better international prices, according to Moscow-based analyst SovEcon. "As the international markets keep going down and buyers remain cautious, we expect domestic prices to continue declining," the analyst said in a note. "Prices of $200 per ton may be reached in the nearest future." Meanwhile, farmers in Ukraine are refusing to sell their grain after a collapse in international prices and government policy has made prices less attractive, according to local traders. Paris wheat futures have lost more than a quarter of their value from the peaks of early May as the return of Russia to world markets and improving prospects for Europe's harvest have weighed on prices.
Markets tumbled further last week after a raft of bearish data from the U.S. Department of Agriculture and the International Grains Council eased concerns of a shortage of world grain supplies. SovEcon also said many buyers in Russia have already bought enough supplies ahead of the end of the ban last Friday. Russian customs approved one million metric tons of grain for shipping abroad on the first day the country resumed grain exports, according to Deputy Prime Minister Viktor Zubkov. One trader said eight million tons of excess stocks held in the country have already been contracted for export. "The reason behind the halt is not only the downward trend on the world markets, but the fact that many traders have built sufficient stocks to cover already signed contracts," said SovEcon. In Ukraine, government export duties on grain and a decision to stop refunding the value added tax that grain traders pay to farmers are also making prices less attractive, said the traders.
"A combination of a drop in world price, a changed VAT law to farmer's disadvantage, and introduction of export duties has caused price collapse," said one senior trader. "The farmer is a very reluctant seller at the moment." Ukraine exported 11.95 million metric tons of grain in the 2010-11 marketing year from July to June, down from nearly 22 million tons in the previous marketing year, Ukraine Agrarian Confederation said Friday.

China Corn Demand Strong As Hog Ratio Gains
China sold 120,440 metric tons of corn or 45% of the volume it offered from state reserves in an auction Tuesday, while an indicator of profitability for hog farmers rose to a record level, government agencies said. The ratio of sales to offer volumes was the highest this year, according to Dow Jones Newswires calculations, indicating strong demand for below-market-price state corn reserves as breeders expand hog production amid record high pork prices. China offered 266,028 tons of corn in the Wednesday auction, the National Grain and Oil Trade Center said, down sharply from around 420,000 tons a week earlier. It was offering around 1.8 million tons each week early this year, but reduced offer volumes to about 600,000 tons per week from April due to dwindling stocks. Strong demand from processors and feed mills has driven corn prices 20% higher so far this year, and the government's weekly sales have done little to cap the price gains, as only some feed-mills and animal breeders are qualified to participate.
The ratio of sale prices for hogs to corn prices, an indicator of profitability for pig farmers, was at 8.47 as of June 29, the National Development and Reform Commission said separately, the highest level since the country's top economic planner began publishing the indicator in May 2009. The hog-to-corn-price ratio was 4.8 last June, when pig farmers suffering deep losses. A ratio of 6 is roughly a break-even level for pig farmers.

India Farm Ministry Not Pushing For Grain Exports - Minister
India's farm ministry isn't pushing for export of grains such as rice and wheat, Farm Minister Sharad Pawar said, reversing his previous stand. "We are not in a position to push for exports as we are waiting for the national food security bill, which is likely to come up in parliament," Pawar told reporters. Pawar last month favored rice and wheat exports as the country has surplus stocks and is likely heading to another year of a bumper output. India's foodgrain stocks are at an all-time high of 65.47 million metric tons, about two-and-a-half times more than the annual requirement for state welfare programs. Still, the government is cautious on exports due to inflation fears and its plan to enact a law that seeks to expand the supply of subsidized grains to the poor.
"Our policy on exports will depend after we decide on price and quantum of foodgrain to be distributed under the proposed act," Pawar said. A decision on grain exports will be taken in a ministerial panel's meeting in July. India has maintained a ban on wheat shipments since 2007 and on rice since 2008 to keep a lid on prices.

India To Complete Fresh Cotton Export Allocations On Time
India will by Wednesday complete allocations for cotton exports of an additional 1.0 million bales for this marketing year through September, the head of a trade ministry wing said, brushing off concerns about a delay after some exporters objected to new rules. "There is no direction for any change [in the process of allocations]. We are on track," Anup K. Pujari, Director General of Foreign Trade, told Dow Jones Newswires. "We are hoping to complete the allocation process by tomorrow." "If the whole thing gets delayed, then exports may not be possible," he said, when asked whether there was any chance of a delay. India is the world's second-largest cotton producer and exporter, and a delay in fresh supplies from the South Asian country would have pushed up international prices. In June, the government allowed exports of one million bales of 170 kg each--but it said that only exporters with an established track record over the past two marketing years could apply.
The new rule came after a scramble for licences in November, when the government allowed cotton exports of 5.5 million bales of 170 kilograms each for the marketing year through September. Many sought licenses without getting orders, but several traders with assured buyers lost out on getting permits as they waited for order confirmations before applying. As a result, a large number of traders failed to export the quantities allowed to them within the Dec. 15, 2010, deadline. In January, the government had to issue fresh licenses to allow the export of 1.9 million bales which were unshipped. Again, it had a tough time dealing with a deluge of applications. According to the new rules, traders will be fined up to five times of the goods' value if they fail to export by Sept. 15, 2011.
Defaulters will be barred from further exports, should the government decide to raise the shipment quota again in 2010-11. Industry officials said that one or two exporters had objected and moved court against the new rules, particularly as they barred new entrants to the market.

Crude Oil Trades Near Three-Week High on Forecast Drop in U.S. Stockpiles (Source: Bloomberg)
Oil traded near a three-week high in New York on speculation crude inventories declined for a fifth week in the U.S., signaling fuel demand may be rising in the world’s biggest consumer of the commodity. Futures were little changed, after advancing 2.1 percent yesterday, before an Energy Department report tomorrow that may show crude stockpiles dropped 2.5 million barrels last week, the longest streak since January. The industry-funded American Petroleum Institute will report its own data today. Supplies are shrinking amid peak gasoline demand in the U.S. and the start of the Atlantic hurricane season.

Bear Market in Tin Ending as Shortages Mean PT Timah’s Profit Advances 55% (Source: Bloomberg)
Erfandi’s fleet of bamboo rafts are dredging 33 percent less tin ore from the rivers of Indonesia’s Bangka Island than in 2008, as miners fail to keep pace with consumption that jumped 14 percent in two years.

Collahuasi suffers bad weather again, operations up
SANTIAGO, July 4 (Reuters) - Chile's giant Collahuasi copper mine said on Monday it was operating under a contingency plan due to bad weather that has delayed a workers' shift, a company spokeswoman said on Monday.
Collahuasi, the world's No. 3 copper mine, saw output dwindle in the first quarter due to heavy rains that disrupted operations.

Chile Codelco seeks to avert 24-hr workers' strike
SANTIAGO, July 4 (Reuters) - Chile's Codelco on Monday sought to avert a 24-hour strike by workers demanding a bigger say in the restructuring of the world's top copper miner, the company's top executives said on Monday.
Union leaders called for a walkout on July 11 to halt operations at all six mines owned by Codelco, which produces 9 percent of the world's total mined copper. Workers at each mine still have to ratify the strike action in a vote.

Kazakhstan, Slovakia to develop large lead deposit
ASTANA, July 4 (Reuters) - Kazakhstan's state-run miner Tau-Kent Samruk clinched a deal with Slovak firm Radington Industrial Consulting on Monday, aiming to develop jointly a large lead deposit in the Central Asian state.
"We initially estimate this project will need an investment of around $50 million," Bolat Svyatov, chief executive of Tau-Kent Samruk, told reporters after the two sides signed a framework agreement on developing the Alaigyr deposit.

Sugar near 4-month peak, coffee dips as dollar firms
LONDON, July 5 (Reuters) - ICE raw sugar futures firmed to four-month highs in early trading , underpinned by concerns over the Brazilian crop, while coffee eased weighed by a stronger dollar and cocoa firmed. ICE raw sugar futures rose to four-month highs as the market adjusted to London white sugar futures prices after a long weekend for a U.S. holiday.

Vietnam Coffee-July exports to dip, premiums jump
HANOI, July 5 (Reuters) - Vietnam is expected to export between 45,000 tonnes and 70,000 tonnes, or 750,000 and 1.17 million bags, of coffee this month, down from an estimated loading of 80,000 tonnes in June, further pushing up premium levels, traders said on Tuesday.
This could prompt buyers to seek alternative supplies in Europe, where stocks in warehouses are high, while hopes also hinge on the release of volumes in Vietnam when prices touch a sufficiently high level, traders said.

Ivorian rains boost cocoa, more sun needed-farmers
ABIDJAN, July 4 (Reuters) - Rains in Ivory Coast's key cocoa growing regions last week were ample for the development of the mid-crop until late August, but cloudy weather raised concerns about pests, farmers said on Monday.
Ivory Coast is on the entering the last three months of the 2010/11 season in what is expected to be a bumper crop well ahead of the government's 1.3 million target, thanks largely to good rains.

Bumper Ghana cocoa crop strains local storage
ACCRA, July 4 (Reuters) - Cocoa purchases in world No. 2 grower Ghana reached 940,000 tonnes by mid-June, putting output over 50 percent ahead of last year, the head of the Ghana Cocoa Board (Cocobod) said on Monday.
Cocobod Chief Executive Tony Fofie told Reuters the bumper harvest had strained storage facilities and led to some congestion at some port and depot facilities.

Ivorian cocoa arrivals approach 1.3 mln T target
ABIDJAN, July 4 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast were creeping closer towards the government's 1.3 million tonne target for the season last week, reaching around 1,287,000 tonnes by July 3, exporters said on Monday.
The figure showed deliveries to the main ports of Abidjan and San Pedro running 20 percent ahead of the same period of the previous season, in which 1,058,911 tonnes were delivered.

Indonesia cocoa output may fall to 420,000 T
SINGAPORE, July 4 (Reuters) - Indonesia, the world's third-largest cocoa producer, may see this year's output fall to its lowest since at least 2004 at 420,000 tonnes due to erratic weather and a fungal disease, the Indonesian Cocoa Association (Askindo) said on Monday.
Concerns about supply from Indonesia, which accounts for 10 percent of global output, could offer support for New York cocoa futures , which have dropped from a 32-year peak hit in March partly due to the return of peace in top grower Ivory Coast.

Crop, economic outlook in focus at cocoa meet
SINGAPORE, July 4 (Reuters) - Rising production in Africa, a surplus in international markets, erratic weather in Indonesia, global economic health and hopes for a recovery in the grinding sector will dominate a cocoa conference in the Indonesian resort island of Bali this week.
Cocoa futures soared to a 32-year top at $3,775 a tonne in early March after a deadly post-election conflict in the world's largest producer, Ivory Coast, fuelled fears of a civil war. But prices have since slipped as peace gradually returned.

METALS-Copper steadies as relief rally peters out
July 5 (Reuters) - Copper steadied on Tuesday as a pick up in demand for risky assets petered out and markets awaited U.S. data for fresh direction, while some wondered if copper prices have climbed too far too fast, given still-scant signs of demand from China.
Three-month copper on the London Metal Exchange traded at $9,445 a tonne, compared with a close of $9,455 a tonne on Monday.

PRECIOUS-Gold climbs as risk aversion picks up
LONDON, July 5 (Reuters) - Gold prices rose back above $1,500 an ounce in Europe on Tuesday as risk aversion returned to the financial markets, stoked by concerns over the outlook for the Chinese economy and plans to roll over Greek debt.
Spot gold was bid at $1,502.39 an ounce at 1110 GMT, against $1,495.54 late in New York on Monday. U.S. gold futures for August delivery rose $20.50 an ounce to $1,503.10.

Pacific Climate Indicators Remain Near Neutral
Oceanic and atmospheric indicators of La Nina or El Nino climate events in the Pacific Basin remain around neutral levels, with a key indicator falling to its lowest level since April 2010, the government's Bureau of Meteorology reported. "Climate models surveyed by the Bureau of Meteorology suggest that the Pacific Ocean will continue to warm over the coming months, with neutral conditions likely to persist into late 2011," the bureau reported in its weekly tropical climate note. The bureau's Southern Oscillation Index registered a value of +1.6 in the 30 days ended July 2, compared with +3.8 in the 30 days ended June 20, it said. Sustained positive values of the SOI above +8 may indicate a La Nina, while sustained negative values below -8 may indicate an El Nino.
Values of between about +8 and -8 generally indicate neutral conditions. The key indicator of a La Nina is cooler-than-average sea surface temperatures in the central and eastern tropical Pacific. By contrast, the opposite of a La Nina event--El Nino--is associated with warmer-than-average temperatures in the eastern Pacific. Typically, El Nino conditions result in below average rainfall over much of eastern Australia while a La Nina results in above average rainfall over most of the continent.

Soybeans (Source: CME)
US soybean futures end higher, but remain confined within recent trading ranges in the absence of fresh demand to extend advances. The market is trapped in a range until it can receive some fresh meaningful news to change market outlooks, says Sterling Smith, analyst with brokerage Country Hedging. There is enough doubt about the 2011 crops and acreage to underpin prices, but a lack of weather threats limit advances, he adds. Traders say the buying of corn and wheat versus selling soy on spreads limited advances as well. CBOT November soy ended up 5 1/2c at $13.18/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures finished mixed, with prices chopping around in unison with soybeans. Soymeal and soyoil ended with prices hovering near unchanged levels, as traders were unwilling to aggressively push prices in the absence of fresh directive news, analysts say. CBOT Dec soyoil end down 0.09c at 56.21 cents/pound, and Dec soymeal end down 10 cents at $340.90/short ton.

Palm oil eases to match 8-mth low as stocks seen rising
JAKARTA, July 5 (Reuters) - Malaysian palm oil futures traded lower in a tight trading range , matching an eight-month low touched last week, as output entered into a higher production cycle and lukewarm demand pushed prices lower.
"It is most likely that people are worrying about higher end stocks in Malaysia," said one Indonesia-based trader. "Malaysian production is still good, with Indonesia lagging. The 3,000-level is a support level."

Malaysia June palm oil stocks seen near record levels
KUALA LUMPUR, July 5 (Reuters) - Malaysian palm oil stocks likely rose 11.3 percent to near record levels in June as strong production and imports outpaced local and overseas demand, a Reuters poll showed on Tuesday.
Stocks in the world's No. 2 palm oil producer climbed to 2.13 million tonnes from a month ago -- just shy of a record 2.2 million tonnes hit in December 2009, a median survey of six plantation houses showed.

Argentina's El Tejar turns No. 1 Brazil soy grower
SAO PAULO, July 4 (Reuters) - With only eight years in Brazil, Argentine farming group El Tejar has overtaken the leading national grower in soybean output through a business model of leasing local farmland rather than buying it.
O Telhar, as it is know here in Portuguese, has focused its operations in Mato Grosso, Brazil's main soybean producing state in the center-west grain belt, where it plants 300,000 hectares (740,000 acres), analysts estimate.

Brazil soy sales edge higher, crop revised up--Celeres
SAO PAULO, July 4 (Reuters) - Sales of Brazil's upwardly revised record 74.8-million-tonne soybean crop edged up slightly from the previous week, analysts Celeres said Monday.
In its latest weekly report, Celeres said sales of the current crop that ended harvesting in May stood at 73 percent by July 1, up from 72 percent in the previous week but slightly behind the average rate for this time of year of 74 percent.

Brazil's 2010-11 Soy Crop Seen At Record 74.9M Tons
Brazil's 2010-11 soy crop was larger than previously estimated, as higher productivity and a greater area of land planted with the oilseed resulted in record output, agricultural consultancy Celeres said Monday. Brazil's recently harvested soy crop likely reached a total 74.9 million metric tons, up 9.3% from the 2009-10 volume, Celeres said in a weekly report. The latest calculation surpasses Celeres's previous estimate of 73.6 million tons, made a month ago. Celeres said good financing availability gave soy producers conditions to invest in technology and to expand their planted area. Weather cooperated. Soy production surpassed previous estimates in Parana, Goias and Rio Grande do Sul, among other states, Celeres said.
On the other hand, production was hampered in Mato Grosso do Sul because of late planting and in Minas Gerais due to excessive rainfall. Nationwide, 24.1 million hectares of land were planted with soy in the 2010-11 crop, up 3.5% from a year earlier. Productivity rose 5.6% to 3,101 kilograms of soybeans per hectare. Sale of the crop now stands at around 73% of the amount produced and is roughly in line with the average of the past five years, Celeres added. An ever-strengthening local currency has eaten away at the bonanza that Brazil's soy producer are seeing as a result of the record production. Local soy prices fell by about 1.6% last week as the Brazilian real appreciated to its highest level against the dollar since 1999.

Palm Oil Dropping to Lowest in More Than Nine Months May Reduce Food Costs (Source: Bloomberg)
Palm-oil prices may extend their decline to the lowest level in more than nine months as supply climbs in Malaysia, the second-largest producer, potentially helping trim global food costs. The tropical oil may tumble 7.9 percent to 2,800 ringgit a metric ton ($931) by Sept. 30, a level last seen in early October, according to the median estimate in a Bloomberg survey of eight analysts. Inventories climbed 5.8 percent to 2.03 million tons in June in Malaysia and output increased 2.3 percent to 1.78 million tons, a separate survey of three analysts and two plantation companies showed. Cheaper prices of palm oil used in instant noodles, margarine and soaps may cool global commodity costs, curbing inflation that has spurred more than two dozen countries to increase interest rates this year and containing expenses for Unilever and Nestle SA. Food prices tracked by the United Nations increased nine times in the past 11 months and in May, stayed near their record reached in February.
“The velocity of CPO production is unbelievable,” said Dorab Mistry, director of Godrej International Ltd., referring to crude palm oil. He correctly predicted last year that prices would climb to more than 3,000 ringgit. “I have never seen anything like this in Malaysia.”

Malaysian Supply
Palm oil climbed to 3,967 ringgit on Feb. 10, the highest level in almost three years, as global demand outstripped supply before reversing to close at 3,040 ringgit today, a 20 percent decline this year. The Standard & Poor’s GSCI gauge of 24 commodities tumbled 7.8 percent last quarter as wheat dropped 20 percent, cotton slumped 41 percent and oil retreated 11 percent. Production from Malaysia may reach 17.6 million tons this year from 17 million tons in 2010, said Plantation Industries and Commodities Minister Bernard Dompok in March. The palm-oil board may increase its forecast to between 18 million and 18.5 million tons, Ong Chee Ting and Chai Li Shin, analysts at Maybank Investment Bank Bhd., said in a report on June 28. “In the near-term we may see some weakness in production, as sometimes in the festive season they have less harvesting, but it should come back after July-August,” Arhnue Tan, senior investment analyst at ECM Libra Capital Sdn., said from Kuala Lumpur.
Muslims observe a day-long fast during the month of Ramadan, which precedes the Eid festival and may start on Aug. 1.

Soybean-Oil Premium
Monthly production may climb as high as 2 million tons and stockpiles may reach 2.2 million tons, Tan said. Inventories of that size would be the highest since December 2009, according to board data. The peak production season is from June to October. The palm-oil board is scheduled to publish its estimates for production, stockpiles and exports last month on July 11. Production climbed 14 percent to 1.74 million tons in May from April, the highest level in 19 months, the board said. Output jumped 15 percent to 4.69 million tons in the three months through May from 4.08 million tons in the year-ago period. Global exports of 17 oils and fats will climb 4.6 percent to 70.3 million tons in the year through September 2012 from the year ago, Oil World said June 28. Palm oil may represent almost 56 percent of shipments, the Hamburg-based researcher said.
“While palm oil inventory is currently ample, the supply of soybean oil and rapeseed oil is tight, providing some floor to the price,” Maybank analysts Ong and Chai said. That pushed the premium of soybean oil over palm oil to $243.26 a ton on June 27, the highest since January 2009.

Indonesia Production
These large discrepancies would probably spur so-called price-sensitive countries to shift away from soybean oil and rapeseed oil to the tropical oil, RHB Research Institute Sdn., said in a report dated June 30. Supply from Indonesia, the world’s biggest grower, is expected to keep expanding at 10 percent to 12 percent each year, the nation’s trade minister Mari Pangestu said in an interview with Bloomberg Television on June 13. The country may produce 25.4 million tons in the year beginning Oct. 1, up from 23.6 million a year earlier, according to U.S. government estimates. “Production is expected to keep on increasing from now because the weather condition is being supportive and extraction is happening well,” Vimala Reddy, an analyst at Karvy Comtrade Ltd., said from the Indian city of Hyderabad, referring to the oil removal rate from fresh-fruit bunches.

US soybean futures end higher, but remain confined within recent trading ranges in the absence of fresh demand to extend advances. The market is trapped in a range until it can receive some fresh meaningful news to change market outlooks, says Sterling Smith, analyst with brokerage Country Hedging. There is enough doubt about the 2011 crops and acreage to underpin prices, but a lack of weather threats limit advances, he adds. Soy product futures finished mixed, with prices chopping around in unison with soybeans. Soymeal and soyoil ended with prices hovering near unchanged levels, as traders were unwilling to aggressively push prices in the absence of fresh directive news. (Dow Jones)

Scouting a must for 2011 soybean aphids (Source: www.agriculture.com)
Results of fall scouting of soybean aphid indicate that soybean growers may face some level of soybean aphid populations this summer. “We expect Ohio to continue its two-year cycle of very few if any aphids being found followed by low to moderate to even high populations somewhere in the state,” said Ohio State University Extension entomologist Ron Hammond with the Ohio Agricultural Research and Development Center. Hammond and his colleagues scouted for eggs on buckthorn, the pest’s overwintering host, and found some eggs, although not as many as anticipated. However, given the observations recorded of aphids on buckthorn in other Midwest states, entomologist believe Ohio will likely see more aphids next year than in 2010. “It is impossible to predict which regions of Ohio, if any, will experience outbreak conditions,” said Hammond, explaining that factors ranging from the weather to natural predators all play a role in the severity of aphid populations.
“At this time, growers should just be aware that scouting for aphids will probably be more important next summer during July and early August.” The soybean aphid, first discovered in Ohio in 2001, is a sapsucker whose voracious appetite can greatly damage untreated soybean fields. It also has been known to transmit a host of viruses, including soybean mosaic virus, soybean dwarf virus, and alfalfa mosaic virus not only in soybean but also in a number of vegetable crops. Soybean aphid populations this past summer were practically nonexistent, although entomologists did see a build-up of aphids on late-maturing soybeans. However, the late aphid build-up was expected and is a contributing factor to finding eggs on buckthorn this fall. For growers, the best way to manage the soybean aphid is to educate themselves on the insect, know when to scout, and to carefully time foliar insecticide applications if treatments are warranted. The economic threshold of aphids is 250 insects per plant with a rising population.
"We continue to recommend taking an Integrated Pest Management (IPM) approach to aphid management. While seed treatments will control early season aphid populations, they will not have any impact in mid-summer when aphids arrive in large numbers," said Hammond. "We will recommend scouting soybeans from early July through August, and using the threshold with a rising population density to determine the need for treatment."

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